Why workers are planning strikes at ports in the eastern US – and how it could lead to chaos for consumers

About 45,000 union members could lose their jobs at seaports on the US East and Gulf coasts on October 1, cutting off key trade routes just weeks before the US presidential election.

A strike could cost the U.S. economy $5 billion a day, according to a JPMorgan analysis.

The strike could hit 36 ​​ports that handle about half of U.S. maritime imports. That could affect the availability of a range of goods shipped by container, from bananas to clothing to cars, while causing weeks of backlogs at ports.

Logistics experts say it could also lead to rising shipping costs, potentially being passed on to voters already frustrated by housing and food inflation.

What's the problem?

The International Longshoremen's Association (ILA), which represents workers at ports from Maine to Texas, and the employers' group United States Maritime Alliance appear to have reached an impasse on the wage issue. The current six-year contract expires at midnight on September 30th.

A strike at all ports on the East Coast and Gulf of Mexico would be the first for the ILA since 1977.

The White House said it was not trying to help negotiate a deal, as was the case in West Coast talks last year, and a Biden administration official said the president would not use his federal powers to negotiate one Block strike.

A widespread and protracted strike could lead to shortages and increased costs across a wide range of industries.

What do dock workers do?

Dock workers, also known as dock workers, take care of the cargo of incoming ships. They work primarily on container ships, but also do some work on car transporters and cruise ships.

They operate cranes that retrieve containers from ships for “lashing,” secure cargo containers so they don’t fall during transit, and complete paperwork.

Cars, machines and parts

According to data from S&P Global Market Intelligence, ports covered by the contract processed $37.8 billion worth of vehicle imports in the 12 months ended June 30. Auto parts are also a major import on the East Coast and Gulf of Mexico, with shipments from Europe more difficult to reroute than those from China, logistics experts say.

The ports also lead the U.S. in shipments of machinery, manufactured steel and precision instruments, totaling $97.4 billion, $16.2 billion and $15.7 billion, respectively, according to data from S&P Global Market Intelligence showed.

Agriculture and pharmaceuticals

About 53 percent of all U.S. agricultural imports by water would be at risk in terms of volume from a strike. According to the American Farm Bureau Federation, the potential value of these exports over a one-week period is estimated at $1.1 billion. For agricultural exports, this value amounts to 318 million US dollars.

Three-quarters of the country's banana imports from countries like Guatemala and Ecuador end up at ports on the East and Gulf coasts, said Jason Miller, interim head of Michigan State University's supply chain management department. The US also imports coffee and cocoa in large quantities and exports cotton.

A strike would also affect containerized exports of soy products and have a significant impact on chilled or frozen meat and eggs, said Mike Steenhoek, executive director of the Soy Transportation Coalition. The $18 billion-a-year U.S. beef and pork export market and the $5.8 billion poultry and egg export sector rely on reefer containers that cannot sit idle for long.

The affected ports also handle more than 91 percent of container imports and 69 percent of container exports of U.S. pharmaceutical products, according to Everstream Analytics.

Consumer goods, energy, military and cruises

Retail accounts for around half of all container volumes. Many U.S. retailers have already rushed to ship end-of-year Christmas items.

According to S&P Global Market Intelligence, ports that would be affected by a possible strike will receive more than half of the country's knitted and non-knitted clothing, worth a total of $32.8 billion, as well as furniture worth $23.4 billion. dollars imported.

Although the Gulf Coast ports of Houston and New Orleans are important hubs for oil and gas shipments, these commodities would have been largely spared from a strike involving more labor-intensive container freight. The same applies to coal exports from Norfolk, Virginia, experts said.

However, the ILA has pledged to handle military cargo and serve passenger cruise ships during a strike.

Higher costs, long delays

Overall, a strike would increase the cost of shipping while causing long delays.

The five largest ports in the negotiating group – New York and New Jersey; Savannah, Georgia; Houston; Norfolk; and Charleston, S.C. — handled more than 1.5 million 20-foot-equivalent units in August, valued at $83.7 billion, according to John McCown, senior fellow at the Center for Maritime Strategy. About two-thirds of that cargo was inbound and the rest was outbound, he said.

Logistics experts warned that trade disruptions due to a work stoppage would begin immediately, leading to higher interest rates and impact on the US economy.

Analysts at Sea-Intelligence, a Copenhagen-based shipping consultancy, estimated it could take between four and six days to clear the backlog of a one-day strike.

Maersk, one of the largest maritime transport providers and a member of the employers' group, warned that a week-long shutdown could require up to six weeks of recovery time, “with significant backlogs and delays worsening with each passing day.”